MSTR Stock Flashing Red as Bitcoin Price Crashes, ETF Outflows Rise

Key Insights

• The MSTR stock price has crashed in the past few days.
• Bitcoin price dropped below the key support level at $73,000.
• Spot Bitcoin ETF outflows have surged in the past few days.

The MSTR stock price has remained under pressure in the past few days, moving from a high of $195 on May 11 to the current $154. This retreat may accelerate in the coming days as Bitcoin plunges and ETF outflows surge.

Bitcoin Weakness Pressures MSTR Stock

Michael Saylor’s Strategy has grown to become the biggest Bitcoin hoarder in the world, with over 843k coins. As a result, its stock price typically reacts to Bitcoin’s performance.

Bitcoin price peaked at $82,500 earlier this month as demand rose. At the time, spot Bitcoin ETF inflows jumped by over $1.6 billion within the first six days of the month.

Now, the situation is getting worse, with the Bitcoin price falling below $73,000 and its liquidations soaring. This crash happened as investors embraced a risk-off sentiment amid signs that the war between the US and Iran would restart.

In a statement, the US CENTCOM said that it launched some self-defense strikes against Iran overnight. It was the second time that the US military did that, meaning that it is slowly invalidating the ceasefire.

The strikes come at an important time in this war. Trump has constantly said that he prefers a negotiated solution with Iran. And last weekend, he said that the two were extremely close to a deal, with most issues being negotiated.

He then changed his tune a day later, saying that he was not in a hurry to reach an agreement. He emphasized that in a White House meeting on Wednesday, insisting that he was not worried about the midterms.

Most importantly, some of Trump’s top allies in Congress are pushing him to go to war with Iran. They are urging him to “finish the job” and warning that any deal will be a reward to Iranians.

A new phase of war would be dangerous for risky assets like Bitcoin and MSTR. For one, it would push crude oil and US bond yields higher, making it hard for the Federal Reserve to maintain the status quo on interest rates.

Spot Bitcoin ETF Outflows are Soaring

The other main risk for Bitcoin and MSTR stock is that spot BTC ETFs outflows are soaring. These funds shed over $733 million in assets on Wednesday this week. They had lost $330 million and $103 million in assets in the previous two days. As a result, these funds have had over $2 billion in outflows this month, the worst performance since November last year.

A likely reason for the outflows is that Bitcoin investors are growing fatigued, as the asset has continued to underperform the market this year. While US stocks have surged to a record high, Bitcoin remains in a bear market after falling by over 20% from its all-time high.

Investors are also rotating towards other viral assets, such as artificial intelligence stocks like Micron and Qualcomm, ahead of the OpenAI IPO. They are also moving into the space industry ahead of the SpaceX IPO.

MSTR Stock Price Technical Analysis

The daily chart shows that the Strategy stock price has crashed in the past few days. It has now crossed the 50-day moving average, a sign that bears continue to prevail. Also, it has moved slightly below the key support level at $157, its lowest level on April 29.

The two lines of the Percentage Price Oscillator (PPO) have crossed bearishly and are now moving below the zero line. Also, its histograms turned red on May 13 this year.

Therefore, the path of the least resistance for the Strategy stock price is downwards, with the next key target to watch being at $100. The bearish outlook will become invalid if it moves above the key resistance level at $175.

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